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SB 26 - This act modifies laws regarding the individual and corporate income tax. The act modifies the individual income tax rate table, so that all income over $7,000 will be taxed at the rate of 5 percent effective January 1, 2014. The act creates an individual income tax deduction for business income and phases it in over a five-year period. Taxpayers will be allowed to deduct five percent of business income for the 2013 tax year and, once fully phased-in, will be allowed a twenty-five percent deduction for all tax years after the 2016 tax year. Shareholders of S corporations and partners in partnerships will be allowed a proportional deduction based their share of ownership. This act reduces the corporate income tax rate from its current six and one-fourth percent of Missouri taxable income each year over a three year period. For the 2013 tax year, taxable corporate income will be taxed at five and five-one-fourth percent. Once fully phased-in, taxable corporate income will be taxed at three and one-fourth percent for the 2016 tax year and all subsequent tax years. Provisions of this act are similar to SCS/SB 661 (2012) and SCS/SB 146 (2011). MIKE HAMMANN
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